Will Obama's Lifting of Sanctions Help Myanmar's Tourism Industry?

President Obama recently announced plans to lift all remaining sanctions against Myanmar as the Southeast Asian country has been making an incremental transition from military dictatorship to democracy over the past five years. Now that the results of last year’s elections, which saw the opposition party led by Aung San Suu Kyi take control of parliament, have not been challenged by the former military leaders, President Obama has said that Washington is ready to restore full trade.

Tourism has already been growing rapidly in Myanmar. According to the country's official count, the number of international arrivals has risen from one million in 2012 to more than 4.5 million in 2015. Could the lifting of sanctions and the return to normalized trade with the United States push the pace of tourism growth even more?

Former military leaders still powerful

Sanctions were still in place because the former military leadership still has control of the armed forces, guaranteed seats in parliament and a major stake in many of the country’s most important industries, including tourism. In fact, before the government reforms began, Myanmar’s junta got at least 12 percent of its annual income from tourism.

While the reforms were taking place, Aung San Suu Kyi repeatedly asked tourists not to come to Myanmar because they were supporting a junta-controlled industry and indirectly putting money in the generals’ pockets.

Rapid growth already taking place

Despite her requests, the tourism industry has already been growing and tour companies have been sprinting to establish themselves in what many consider Asia’s next must-visit destination. This growth has happened regardless of sanctions, but now that the total lift has been announced, American investors and developers may feel more at ease when it comes to establishing operations and launching hotel projects in Myanmar. Actually, many of the restrictions that kept U.S. companies from operating in Myanmar were lifted in May of this year, soon after the opposition officially took control of parliament.

Some have said that Obama is actually moving too quickly and that it might be better to wait for the next president to normalize trade with Myanmar. This is because the military has a stake in so many industries in the country and they would gain power economically from any increase in international trade and investment.

The President explained the timing of the move during Suu Kyi’s White House visit. “It is the right thing to do in order to ensure that the people of Burma see rewards from a new way of doing business and a new government.”

He added that the Myanmar’s democracy is still a work in progress. “It is not complete, and I think Daw Suu [Aung San Suu Kyi] is the first one to indicate that a lot of work remains to be done, but it’s on the right track.”

Ushering in the next stage of tourism development

Myanmar’s tourism growth has been rapid, but the overall number of arrivals is still modest, especially compared to neighboring Thailand, which has a more well-developed tourism infrastructure capable of handling more than 30 million visitors per year. The lifting of sanctions could lead to development in Myanmar that would allow it to better compete with its neighbors for the attention of mainstream tourists.

Myanmar has a lot of things that could help its tourism development, especially as far as American travelers are concerned. English is widely spoken. Despite the past political violence and simmering conflicts in some of its far-flung regions, the country has not had any recent high-profile terror threats or attacks. It has attractions, such as the ancient temples of Bagan and Yangon’s gilded Shwedagon Pagoda, that are on par with its neighbors’ biggest tourism draws.

All the ingredients are there. The lifting of sanctions, though seen as controversial by some, are a signal that the next stage of Myanmar’s tourism development, which could see it transform into more of a mainstream destination, is about to begin.

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